The S&P 500 is a stock market index used to measure the performance of the 500 largest publicly-traded companies in the United States. Historically, the S&P 500 itself has earned an average rate of return of around 10% per year. This doesn't necessarily mean you'll earn 10% on your investments, but it serves as a benchmark for how well the market is doing as a whole.
Since 1950, the S&P 500 has produced an average 12-month return of 10.5% after a golden cross formed, while the overall average annual return was 9.7%. This means that the S&P 500 has been able to consistently outperform its own expectations since 1950.
The S&P 500 briefly rallied but closed at session lows after a trifecta of economic data released on Wednesday. The Commerce Department reported strong retail sales and housing starts, while the Federal Reserve Beige Book showed that the economy continued to expand at a steady pace. Despite the positive news, the market forces, I think, are going to drive average S&P 500 returns lower in the near term.
Yet Berkshire stock is behind the S&P 500 over the past 20 years with a 10.1% annualized return against 10.3% for the index. Over the past five years, Berkshire's return is down to 8.1% versus a fairly strong 11.3% for the S&P 500. This highlights the importance of diversification when investing in the stock market.
Since the average annual return of the S&P 500 is about 6% over rolling 10-year periods, January's performance was pretty extraordinary. The S&P 500 closed at a record high of 3,913.10, representing a gain of 6.2% since the start of the year. The impressive run-up was driven by strong corporate earnings and robust economic data.
*Average returns of all recommendations since inception. Cost basis and return based on previous market day close. Related Articles. A breakdown of the S&P 500’s performance since the start of 2021.
In all three cases, the S&P 500 skyrocketed in the years immediately following those steep losses, producing an average return of 27.1% in 2009, 30.1% in 2003, and 26.8% in 2002. This highlights the importance of staying invested in the stock market, even during difficult times.
... the average annual returns of commodities like oil and gold, bonds, Jones Industrial Average (^DJI -0.38%), benchmark S&P 500 (^GSPC -0.02%), and the Nasdaq Composite (^IXIC -0.14%).
Yet, the S&P 500 has managed to recover from each of its past three bear markets, making it one of the most resilient investments around. While some stock take on much more pain than the average S&P 500 (AMEX:SPY) stock. 10 Value stock strategy is able to produce a +36.60% annual return.
In conclusion, the S&P 500 has earned an average rate of return of around 10% per year, which is higher than the overall average annual return of 9.7%. While the index has been able to consistently outperform its own expectations since 1950, it is important to diversify your investments and to stay invested in the stock market, even during difficult times.
